China announced plans Wednesday to inject 850 billion yuan ($124 billion) into reforming its health care system over the next three years, according to a report.

The move is the first step what is expected to be a decade-long reform to provide basic medical coverage and insurance to all of the China’s 1.3 billion people.

The announcement underscored the communist government’s need to at least make progress on the issue.

“By 2001, within three years, we will remarkably improve the accessibility of basic medical care and health care services and alleviate the burden of the general public for medical costs,” said Zhang Mao, Vice Health Minister in a briefing with reporters, according to the Associated Press.

The funds will be used 29,000 new township hospitals and 2,000 at the county level, the report states. A total of 1.37 million certified health care practitioners will be trained at those clinics. China has almost 700,000 villages.

Costs will be shared between the central and local governments, Finance Vice Minister Wang Jun said, according to AP. The central government will pay for 40 percent of the investment while local governments will provide the rest of the funds, he noted. Final details are still spending.

Priority will be given to impoverished central and western parts of China which have fallen behind the prosperous coastal provinces in the east, Wang said.

Currently, only 30 percent of China’s population is covered. The plan calls for extending basic health insurance to 90 percent of the population by the end of 2011.